[Rant] Costa Rica contemplates CAFTA

The following is an excerpt from a letter I wrote to friends and family while traveling in Costa Rica in July 2007

... Those good old avaricious American neoliberals are at it again, this time targeting all of Central America with propositions of “free trade” through the Central American Free Trade Agreement.

What makes CAFTA an obvious “win” for America, in my opinion, is the fact that the US already has pretty minimal tariffs for incoming Central American imports as a result of the Caribbean Basin Initiative (an old policy initiated during the Cold War with the specific aim of confronting Marxist governments by providing favorable trade conditions with non-socialist governments). Thus CAFTA is clearly a lopsided deal calling only for the reduction of existing Central American tariffs on incoming US imports, which everyone knows will have an advantage because they are often subsidized by the US government.

The US has already [... click on link below to expand to full post] ratified CAFTA in 2005, anxious to get trading as fast as possible - after all, we’re talking about more than $30 Billion a year in commerce. All of the other countries have signed with the US, but Costa Rica has stalled the negotiations because the issue has been incredibly divisive here. Just last week the government announced that the country is going to hold its first ever referendum on the matter: To join or not to join, that is the question! Both the ‘Si’ and the ‘No’ campaigns appear to be very active, although in different capacities. For example, it is quite common to see graffiti or posters on the streets throughout the country, saying stuff like “No hay ambiente para el TLC!” whereas the ‘Si’ campaign – backed by big business – puts out “neutral editorials” in the national papers claiming that it would be economic suicide not to sign the deal.

Aside from acquiring access to yet more “markets” and forcing monetarist and neoliberal policies upon Costa Rica and the other nations incorporated in the deal, the US is particularly interested in some of the nationalized industries here. Obviously the privatization of public enterprises and services is one of the key components of the trade deal. For example, Costa Rica’s state-run electricity company, I.C.E, is a large unionized firm which handles all of the electrical infrastructure (including hydro-electric dams) in the country. ICE is just one of the firms that the US is after. The free trade deal would likely see the deregulation and privatization of the entire utilities industry (and thus the folding of ICE), the firing of thousands of organized employees, and eventually the transfer of capital to the shareholders of the new private enterprises, who will almost certainly be American or, if not, then part of the Central American elite upper class. Yet supposedly this result would be good for the general populace, proponents claim, because it will drive down prices, create competition and innovation in the utilities realm (and thus efficiency), and allow public “choice” and market freedom (in only it were that easy!).

Most locals I’ve talked to think they’re going to get their slice of the pie. I think they’re dreaming, and I try to express my opinion through my semi-functional Spanish. I’ve spoken to a number of ticos (Costa Ricans), for instance, who are in favour of the deal because they think the American tourists will stop coming here if the country doesn't sign the agreement (this despite the fact that there are more and more tourists coming every year without any existing free trade deal). One man told me that he felt that Costa Rica had to sign the deal because otherwise they would be left in the Chavez camp, and that was a dangerous place to be. This kind of fear – fear of offending the Empire, or arousing the giant – is easy to understand considering the history of American intervention in Latin America during the Cold War. It is a lesson that Guatemala learned in 1954, that Chile learned in 1973, and that Nicaragua learned in 1979 (to name just a few of a plethora of examples): That lesson being that to jeopardize large-scale American capitalist interests is interpreted by the US ruling class as a an act of war - and they will come back with all of the resources that their lobbyists and think-tanks and media conglomerates can muster up: from vicious publicity to covert CIA-sponsored coups to the full-fledged launching of wars (it has happened more than once!).

The referendum is an interesting way of handling the issue. On one hand it is an ideal form of democratic governance: This is a divisive and important issue, so let the populace decide. On the other hand, it is a way for the government to absolve itself of any responsibility for anything that goes wrong in the future. If access to information and a “neutral analysis” (if such a thing exists) were more readily available, the referendum may not be a bad way of handling it. Unfortunately at this point there seems to be solely confusion about the issue, and people feel pressure to vote one way or the other because of manipulative information rather than voting for the good of the community at large....